Mohela Public Service Loan Forgiveness

Mohela Public Service Loan Forgiveness

The U.S. Small Business Administration issued a one-page application form that aims to simplify the process of applying for the forgiveness of Paycheck Protection Program loans, together with revised and updated forms to meet the requirements of the most recent stimulus legislation. 

The COVID-19 relief plan that Congress passed last month revived the PPP with $284 billion of funds for small businesses that want forgiven loans to help cope with the economic fallout of the coronavirus epidemic. The law requires that the SBA issue simplified forms within the first 24 hours of the legislation’s signing into law. This was done to simplify the process of applying for forgiveness. The legislation also contained conditions to encourage banks in the community to lend more specifically to minority-owned companies who were unable to obtain loans last year.

Mohela Public Service Loan Forgiveness

“The Small Business Administration met the requirement of releasing the one-page form for PPP loan forgiveness within 24 hours of the date of the enactment of the Consolidated Appropriations Act, 2021,” wrote Ed Zollars, a partner at Thomas, Zollars & Lynch CPAs on his Current Federal Tax Developments blog for Kaplan Financial Education. “The agency also released updated forms.”

Forgiveness terms in the first draw of PPP loans

Mohela Public Service Loan Forgiveness – For eligible borrowers First Draw PPP loans can be qualified to be forgiven. This happens when the loan payment is made within an 8 to 24-week period.

  • Pay and worker levels are ensured
  • The loan proceeds are used on payroll expenses and other eligible expenses; and
  • A minimum of 60% of proceeds are used for the cost of payroll

Second Draw PPP Terms of Loan Forgiveness

Second Draw PPP loans for eligible borrowers are eligible for loan forgiveness if the loan is paid within an 8 24-week time frame.

  • The levels of compensation and employee pay are maintained in the same manner as required for the First Draw PPP loan
  • The loan proceeds could be used to cover expenses for payroll or other expenses that are eligible.
  • A minimum of 60% of the profits are used for the cost of payroll
  • When and how do I apply for loan forgiveness?

A borrower may apply for forgiveness once all loan proceeds for which the borrower is requesting forgiveness have been utilized. The borrower can apply for forgiveness at any point up to the date at which the loan matures. Borrowers who do not request forgiveness within 10 month of the expiration date of the loan will be able to receive payment from their PPP lender.

Download Mohela Public Service Loan Forgiveness

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